Ryanair said it plans to cut fares by 7% this year as annual profits at the budget airline soared by almost half.

The Dublin-based carrier said it expects to reduce fares as it bids to maintain market share across a European airline industry that has been hit by the terror attacks in Brussels and Paris.

The impact of the recent EgyptAir plane crash may further weaken the appetite for international travel over the coming months.

The cuts in fares come as Ryanair posted profits after tax up 43% to 1.24 billion euros (£959 million) in the year to March compared with a year ago, just short of City forecasts of £1.3 billion (£1 billion).

The airline said over the previous 12 months it cut average fares by 1% to 46.67 euros (£36.11), as it passed on fuel savings which has seen oil prices fall some 70% since the summer of 2014.

The carrier said passenger numbers lifted by 18% to 106.4 million over the period.

Ryanair chief executive Michael O'Leary said: "The full-year to 2016 was a year in which we delivered significant traffic and profit growth in all four quarters."

However, the carrier said sales in the fourth quarter of its year were hit by more than 500 flight cancellations caused by a combination of the Brussels attacks in March and a series of French air traffic control strikes.

It added that revenues in the first quarter of its new year will also be impacted by air traffic control strikes in Italy, Greece, Belgium and France.

The business said sales in this period would also be hit by lower fares and a weaker pound in the run-up to the UK's Brexit vote on June 23.

However, the airline said it "cautiously" forecasts net profits this year will rise by around 13% to between 1.38 billion euros (£1.07 billion) and 1.42 billion euros (£1.10 billion).

The airline reiterated its call for the UK to remain in the EU ahead of the vote next month, saying it is "actively campaigning" for a Remain vote to win.

It said: "If the UK leaves the EU then this, we believe, will damage economic growth and consumer confidence in the UK for the next two to three years as they begin to negotiate their exit from the EU and re-entry to the single market in very uncertain market conditions."

Analysts at Liberum said: "The results for the year to March were in line with consensus and our estimates. Compared with our forecasts, revenue was slightly light but costs marginally better than forecast."

Last month rival easyJet swung to a half-year loss after it said the recent terror attacks saw some passengers stay away and rivals stepped up the pace of competition.

The no-frills airline posted losses of £24 million for the six months to the end of March against profits of £7 million a year earlier, but said its bottom line was hit by a £33 million foreign exchange rate impact.